How Toyota’s Lean Approach to Production Can Be applied in the UK National Health Service

Introduction

For the past one decade, leading organizations have been importing concepts from lean manufacturing into service sectors such as travel, government, retail, financial services and even healthcare. Financial services have been at the forefront of this transformation, but healthcare systems are also increasingly adopting this production method. In fact, healthcare centers like Hirslanden Klinik St. Anna in Switzerland and the Virginia Mason Hospital in the United States are already accruing the benefits of lean management after successful implementation. Lean hospital management draws from Lean management, a system that was commercialized by Toyota in the 1980s and 1990s (Krafcik, 1988). On the surface, it may seem bewildering as to how a concept that originated from the manufacturing industry is being put into operation in the healthcare sector. Precisely, one may wonder how the concept has been successfully implemented in select healthcare systems thus far. In reality healthcare care services are in the vein of industrial production when it comes to success factors, of which customer satisfaction is always a priority. The primary aim of lean management is essentially to “create value and reduce waste” (Dennis, 2016). Therefore, a lean management system normally focuses and expands on activities that add customer value while striving to eliminate any other redundant activities. This results in higher efficiency and effectiveness through customer focus. The principles of lean management are applicable in many settings, including healthcare systems where patients’ needs ought to be prioritized. This paper discusses how Toyota’s lean approach to production can be applied in the UK National Health Service (NHS).

A brief History and Overview of Lean Management

The development and implementation of the lean production system commenced at Toyota Motor Corporation (TMC) (Ohno, 1988). Its primary purpose was to increase efficiency in the manufacturing process as well as produce high quality cars in minimal time, at low cost, and without much wastage of resources. Therefore, lean guaranteed positive synergies in quality improvement, time reduction programs, and cost reduction without trade-offs and sacrifices. Compared to other traditional systems of production, lean production was superior in that it enabled TMC to gain a competitive edge over its rivals through maximization of available resources like labor, fuel, land, and raw materials. TMC extended the lean system throughout its supply chain to experience higher operational results. To prepare the entire organization, Toyota featured all its major suppliers, distributors, dealers, contractors, and affiliates in an organization wide training on lean thinking and production. The company has now grown to be the largest automaker in the world.

Thanks to Toyota’s Pioneering success, industries are now moving toward lean thinking and management. Today, the “lean” concept is being utilized in addressing cost, quality, and delivery of a company’s processes through the use of a set of integrated principles, tools, and techniques. Moreover, lean is being perceived as an approach to teamwork, problem-solving, and leadership that leads to continuous improvement in all organizational departments by emphasizing the needs of the clientele and empowerment of the workforce. Systems that that utilize lean thinking concentrate more on processes than the final outcome or delivery of the product (Allway & Corbett, 2002). Since its fresh implementation in other sectors apart from manufacturing, lean production has also proved to be a capable strategic approach for resolving organizational issues and amalgamating change initiatives.

Lean can be managed either as a system for realizing cost efficiencies or as smaller iterative and discrete initiatives within the organization, and tends to be more beneficial when applied via a “top down” approach” (Dennis, 2016). If applied effectively, lean can be the major motivator behind relentless drive for improvement in the organization. Sometimes lean is interpreted as the opposite of “fat” by assuming that its real motive is to lay off employees (Dennis, 2016). However, lean is not directly associated with staff layoffs and resource cutbacks but is rather about focusing efforts of the workforce to creative tasks through acceleration of operations via progressive elimination of idle time and wastes that result from bureaucracy and paperwork.

The biggest challenge in the application of lean approach to production in service industries is the lack of references for implementing the system in a service-based industry (Leite & Vieira, 2015). Even though lean management has been successfully embraced by select service-based organizations, a universal framework or general guideline is lacking. Additionally, the implementation of lean and achievement of different levels of organizational commitment, workforce autonomy, and transparency in data reporting needed in the realization of success is quite complicated.

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Implementation of Lean Management in the health Sector

Healthcare leaders are becoming aware of the numerous benefits that healthcare systems can accrue from the use of lean principles. In fact, the Institute of Healthcare Improvement believes that the adoption of lean management strategies can help healthcare systems enhance processes and outcomes, as well as reduce costs and improve satisfaction not only for patients but also among employees and providers. The power of lean in healthcare has already been illustrated by specific systems such as Virginia Mason hospital in Seattle, Washington, which has embraced lean management techniques for over a decade (Nelson-Peterson & Leppa, 2007). Through lean thinking, the hospital has worked toward the reduction of wastes and creation of practices that contribute to better patient outcomes. The hospital’s management reported noteworthy savings after scrapping unnecessary expansions, including $1 million for a hyperbaric chamber, $1 to $3 million for endoscopy suites, and $6 million for surgery units that were no longer a priority (Womack et al., 2005). Overall, Virginia Mason hospital has continuously improved and redesigned its processes to eliminate waste, require fewer employees and rework, as well as improve the quality of services (Womack et al., 2005).

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So how can UK’s NHS apply the lean management approach? Lean requires healthcare systems to exert effort along various dimensions at the same time (Waring, & Bishop, 2010). This ambitious approach also necessitates deep commitment as it impacts all levels of the organization. To prepare for implementation the NHS needs to groom healthcare facilities in the behavior and culture dimensions (Womack et al., 2005). It is clear that lean practices should be taken into account under the oversight of their cultural origin. Three major traits borrowed from Japanese ways of thought are group loyalty, harmony, and life-time employment. These are further amalgamated in the principle of “respect for people” (Fukuda, 1986). The main point to consider when attempting to integrate the lean management system in healthcare is that decisive factors in the managerial processes are alike for all industries. This is the main reasoning behind the implementation of lean principles of production and management in healthcare systems.

Lean Principles

There are five major lean principles that apply within the NHS including identification of customers and specification of value added, identification and mapping of value streams, creation of flow through elimination of wastes, organization in accordance with customer pull, and continuous improvement.

Identification of customers and specification of value added

Value-adding activities from the client’s perspective are crucial (Koning et al., 2006). Thus, every healthcare organization within the jurisdiction of the NHS should identify its customers and proceed to examine their needs (Joosten, Bongers, & Janssen, 2009).Patients are the most obvious clients in a hospital setting. However, the wider scope of customers includes such parties are relatives, health insurance firms, and the UK government. Moreover, other “internal” customers like emergency units and medical disciplines need not be disregarded. Healthy coordination among all clients must ensure if healthcare systems are to achieve success as effective functioning systems.

Due to the huge diversity of each customer group, each customer has a unique perspective when evaluating the value added. The patient, for example, considers the process of recuperation and achievement of a higher state of health as value added. The health insurance firm, might oppositely, focus on efficient medical services. To end with, the patient’s relatives may require regular information on their beloved’s state of health. A healthcare facility can identify the value added by considering what the customer will be ready to pay for or bearing in mind the value added in the customer’s perspective, particularly in relation to the financial burden incurred.

Identification and Mapping of Value Streams

Common value streams that contain non-valued activities and wastes are admission and discharge from a healthcare facility (King, Ben‐Tovim, & Bassham,  2006). Precise examples are fractions at interfaces between waiting time and medical disciplines and administrative barriers. In order to promote comprehension of value streams, it is recommended that facilities visualize the relevant processes. Further, they should break down single value streams into distinct segments so as to bring problematic issues into light and expose wastes. This reveals possible areas of improvement. Key questions that healthcare providers should as are: What value streams build value to the customer? What are the steps in each process, and in what sequence and time do they occur? Where are the possible problem areas that contain non-valued activities and wastes? (Kim et al., 2006). These questions can help in fostering the comprehension of value streams as well as in laying the groundwork for augmentation.

Creation of flow through Elimination of Waste

The target state of a lean management system is portrayed by waste-free processes which are realized through implementation of the concepts of takt and flow (Radnor, Holweg, & Waring, 2012).  In the healthcare context, this can be achieved through inter-disciplinary thinking. Providers need to be way of the possibility that optimization of select processes may negative affect other processes. Therefore, it may not be feasible to optimize such things as processes of radiology departments to cope with many patents while disregarding processes in other departments that are focused on care (Womack et al., 2005). Key questions to take into account are: How can a facility realize a continuous, steady, smooth operation? Is there any unchanging takt guiding process? Where are the precise areas where shortages are apparent?

Organization in Accordance with Customer Pull

This principle concentrates on “demand-governed” provision of services (Kollberg, Dahlgaard, & Brehmer, 2006). Healthcare providers ought to provide services at the right time and in the right quality. Therefore, part of the basic prerequisite is to allocate tasks, competencies, and responsibilities correctly. Service level agreements are particularly crucial in the management of interfaces linking functions within the healthcare setting, for instance between surgery and radiology. This ensures that each discipline is banks on the delivery of services as agreed, contributing to effective collaboration and reduction of redundant activities that result from unclear tasks. Central questions to consider include: Does the customer require the services being provided? Is the service provision timely? Is there a backlog of half-finished tasks in each process? These will help organize demand-based service provision.

Continuous Improvement

The final principle of lean management is grounded on sustainable and continuous improvement (Kim et al., 2006). This implies striving constantly for perfection in all operations within the healthcare perfection. The most appropriate tools to use in this context are Kaizen meetings and boards (Paul Brunet & New, 2003). Through the use of these tools, healthcare teams can regularly work on small developments to be implemented in short periods. For example, a nursing department can utilize ideas provided by nurses to improve everyday work and contribute to continual improvements in the entire facility (Toussaint & Berry, 2013). Some of the questions that hospital administrators need to mull over are: Is there a continuous improvement process in place? Are employees continuously empowered through resources training and other modes of support? These questions allows providers to reflect on the extent at which a particular facility has incorporated the concept of continuous improvement in organizational culture.

Conclusion

As healthcare providers continue to seek innovative ways of improving the quality of service and cutting costs, the healthcare sector is bound to experience significant transformations. One of the recent ways healthcare facilities have tried to assimilate changes is through the adoption of lean principles and practices. Initially, lean thinking was only applied in production-related industries, but now it is no longer constrained in specific industries. Lean offers potential benefits to the healthcare sector including the enhancement of efficiency, reduction of wastes, and improvement of service. With its main focus being the improvement of value, lean can help the NHS balance the costs associated with care, increase job satisfaction of nurses, and improve communities in the UK.

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